In this year’s Federal Budget, single parents who may be struggling to get onto the property ladder, received a helping hand from Government, with the introduction of the Family Home Guarantee. Designed to help single income earners with dependents buy a home with just two per cent deposit, the scheme kicks off on 1 July 2021, but with limited places. Read on to find out more.
Assistance for single parents
Single parents with a household income of less than $125,000 may be able to buy a home with just two per cent deposit.
From 1 July 2021, eligible single parents can apply for one of the 10,000 places available over the next four years under the Family Home Guarantee.
Under the scheme, eligible single parents will only need to save 2 per cent deposit, with Government providing a guarantee up to a maximum of 18 per cent of the property purchase price, allowing the borrower to secure a loan without paying lender’s mortgage insurance eliminating the requirement for costly Lenders’ Mortgage Insurance (LMI).
Usually, home buyers need to save at least a 20 per cent deposit, or pay Lenders’ Mortgage Insurance (LMI) which can easily run into the thousands of dollars.
At this stage, the scheme is targeting single mothers, estimated at around 80 per cent of the 125,000 single parents who may currently be eligible for assistance. The scheme is not limited to first home buyers only.
Rising property prices
As property prices continue to rise across the country, the cost of a deposit has made it even harder for first home buyers to save enough to buy a first home. For single income-earners with dependents, saving a 20 per cent deposit is often completely out of reach.
The Family Home Guarantee will provide significant help to single parents trying to get into the housing market, said Housing Minister, Michael Sukkar.
"The hurdle for single parents on single incomes to get into the housing market is getting that deposit together," he said.
"The family home guarantee will enable single parents to jump that hurdle.”
More options for first home buyers
While the Family Home Guarantee is aimed at helping single parents, it’s not the only Government scheme available. First home buyers may have access to other options from the range of Government-led programs, including property purchasing schemes, grants, concessions, and exemptions that may be available to potential buyers.
If you’d like advice about accessing Government programs to buy your first home, or you’d like to start planning your path to financial freedom, contact a Mortgage Express mortgage broker today.
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